Draft Second Source Best Practice Guidelines Hayes 2010
Draft Model Buying Guidelines to Reduce Stolen, Counterfeit, and Altered (SCAG)
Read Hayes, PhD
Director, Loss Prevention Research Council
The illicit market in stolen, counterfeit, altered and sometimes unlawfully imported goods (SCAG) can be bad for the consumer, bad for the economy, and bad for business.
There are obvious and not so obvious negative consequences of knowingly or unwittingly dealing in SCAG. These issues include retail employees or customers being attacked by shop thieves as they work to supply illicit markets. Just as critical are consumers who may buy mishandled, counterfeit or altered goods that pose significant health and safety risks.
Illicit traders negatively affect the economy by avoiding taxes and undermining local businesses that provide legitimate employment.
There is also clear evidence many of those involved in illicit trading commit other crimes, are members of organized crime syndicates, and their operations help fund criminal and even terror groups or causes.
It is acknowledged the vast majority of second-source or diverted goods are licit, safe, and do not create, support or enable illicit or other harmful activities.
Product stolen from stores, transport assets and warehouses, as well as items fraudulently diverted by dishonest employees, counterfeited, diluted or otherwise altered periodically end up in licit supply chains and stores. This is confirmed by evidence from criminal cases, informants, law enforcement and security experts, and retailer and supplier loss data.
In order to maintain integrity with, and the safety of consumers, shareholders and the public at large, a set of good practice guidelines have been developed. These practices are designed to help guide how retail buyers reduce the probability of buying stolen, counterfeit or altered goods (SCAG). The recommended good practices encourage all buyers to verify the origin and authenticity of products they buy- as well as the operational integrity of buying sources.
These measures will help secure the retail supply chain and prevent thieves and counterfeiters from gaining easy access to the licit supply chain.